Knowledge and Skills Statement
Scientific and engineering practices. The student knows the contributions of scientists and recognizes the importance of scientific research and innovation on society.
Further Explanation
While cost-benefit analysis asks whether the economic benefits outweigh the economic costs of a given policy, cost-effectiveness analysis is focused on the question of how much it costs to get a certain amount of output from a policy. Formulas to calculate the two are listed below.
Cost-benefit = Benefits ($) - Costs ($) (Also known as “net benefits”)
OR
Cost-benefit = Benefits ($) / Costs ($) (Also known as “benefit ratio”)
Cost-effectiveness = Costs ($) / Outcome